Market in Review 4/11/2024

MARKET REPORT

Review:

– US PPI ‘Less’ than expected Exp +0.3% Act +0.2% Prev +0.6% Feb
– YoY +2.4% Mar Exp +2.3% Prev +2% Feb

BUT!:
According to the BLS, the SESONALLY ADJUSTED (??!) gas price in March, MAGICALLY dropped by 3.6%! Even though the unadjusted, as in REAL, GAS PRICE ROSE BY 6.3%!

If the BLS had used the real gas price, PPI would have been 0.4% higher and risen 2.4% YoY, both blowing away estimates (Anyone say election year!).
– HSBC still see Fed cut in June

– FedSpk:
Williams gives little notice to hot CPI
Collins says data argues against imminent need to change rats
Barkin says Fed not there yet on inflation

– US Intitial Jobless fell by 11k to 211k beating Exp of 215K

– US 10yr Treasury Yield hits 5-month high

– ECB keeps rate unchanged
– The bloc’s central bank also said it may consider reducing the level of policy restriction, if it becomes more confident that inflation is moving steadily toward the 2% target.
– inflation has continued to decline, with most measures of underlying inflation and wage growth easing.
– cautioned that domestic price pressures remain strong, leading to high services price inflation.
– President Lagarde ‘ECB is not pre-committing to a particular rate path, and future moves will be data-dependent.’
– Euro Indexes close lower

– Swiss Franc touches 6 month Low

– Morgan Stanley share price sinks 5% on Fed Reg Probe into wealth Mgmt Practices

– AAPL +4%, best day in a yr (To revamp Mac line focused with AI chips). NVIDIA +3%

– JAP PM in Washington

– OJ Simpson dead. Calls for his hearse to be a ’94 Bronco.

– Treasury Yields up, Gold short squeeze to record highs, Tech stocks UP, Crypto mixed, Crude off smalls

DOLLAR DX UNCH: 105.03          UNCH (104.83 – 105.31) MID
– AUD Up: 65.40                               +0.4% (65.53 – 65.11) Off Highs
– EUR up small: 93.18                     +0.13% (92.96 – 93.43) MID
– GBP up small: 125.59                  +0.15% (125.77 – 125.11) Off Highs
– JPY up small: 153.17                    +0.15% (152.78 – 153.31) Off Highs

GOLD UP: $2387                              +1.67% ($2343 – $2388) HIGHS
DOW/ES/ND up/UP:                       38829 +0.2%, 5252 +0.85%, 18510 +1.72%
CRYPTO: BTC/ETH mixed:              +445/+0.64% 70341, -6/-0.2% 3513
CRUDE down: $85.63                     -0.67%/-$0.58 ($86.59 – $84.89) Mid-Lows

Upcoming:

CHI Bal of Trade

EU Council Meeting

DE Inflation

UK GDP

US Michigan Consumer Sent

CHI New Yuan Loans

Speakers:

ECB: Elderson

FED: Bostic, Daly

MAJORS:

DX:
Dollar Sold on PPI before rallying after closer inspection then falling to close UNCH in the afternoon as traders realized Politics rules all and the Biden admin will jockey the BLS hard to jimmy the numbers and allow the Fed an election year cut. See my breakdown above on the specifics. Dollar notable continued to gain vs the Yen despite giving up small ground to the other majors.

DOLLAR DX UNCH: 105.03            UNCH (104.83 – 105.31) MID

No call

AUD:
Rebounded the strongest against the buck after yesterdays underperformance. Closing +0.4% to 65.40 it look like with a B***** PPI number we’ll continue to churn the 65 handle for the foreseeable.

AUD Up: 65.40                                 +0.4% (65.53 – 65.11) Off Highs

No call

GBP
Saw gains on its cyclical factors but also on remarks from BoE’s Greene. Greene stated via the FT that markets must stop comparing the UK and US, noting the inflation persistence is a greater threat for the UK than the US and that rate cuts are a way off. She later stated wage growth is still far too high and the UK has shown signs of coming out of a recession.

GBP up small: 125.59                     +0.15% (125.77 – 125.11) Off Highs

No call

EUR
Little changed but with a softer bias in wake of the ECB. The ECB left rates unchanged as expected but it did not give explicit guidance to a June rate cut, although Lagarde in the press conference repeated her message that they will have a lot more information available by June. She also revealed some policymakers had been looking to cut at this meeting, but ultimately rallied around the consensus. Reuters sources later revealed the dovish policymakers are looking for a July rate cut, following a rate cut in June amid a benign labour market. However, others think the case for a pause after a June cut is becoming stronger due to a continued rebound in US inflation, energy and geopolitics. The reports noted that the hot US CPI was a source of discussion for the ECB.

EUR up small: 93.18                       +0.13% (92.96 – 93.43) MID

No call

9-

YEN:
The weakest of the pack traders expecting BoJ intervention imminently. Whether this will help (It wont. US Inflation issues are likely sticky) is another question. Nomura Securities analysts stated, via Nikkei, that despite a notably tougher tone from officials since late March as the Yen hovered above the 152 mark, “there’s no sense that they’re going to intervene anytime soon.”

JPY up small: 153.17                       +0.15% (152.78 – 153.31) Off Highs

No call

1

GOLD & SILVER:
Another garbage politicized number tweaked to indicate a ‘MISS’ in PPI after yest ‘HOT’ number has now put political rate cuts back on the table. As I said above the BLS used a ‘seasonal-adjustment’ (Care to explain?!) to have Gas actually OFF (I live in the states, its up 5-10%) vs ACTUALL data having it at +6%. Factoring this in PPI would’ve been another hot number. Lies damn lies and st…..
Gold took the opp to short squeeze up to record highs to close $2388. I think its toppy as inflation is still sticky and I cant see rates getting cut, IF IT WASN’T AN ELECTION YEAR and you cant fight the machine.

Gold has essentially rallied on no news

GOLD UP: $2387                              +1.67% ($2343 – $2388) HIGHS

No call

EQUITIES:
US INDEXES:
–  SPX +0.74% 5,199
– NDX +1.65% 18,307
– DJI -0.01% 38,459
– RUT +0.70% 2,042

EUR INDEXES:
– DAX: -0.70% 18,097.00
– CAC: -0.13% 7,977.00
– FTSE: -0.45% 7,907.00
– ES: -0.55% 4,886.00

SECTORS (S to W): Technology +2.36%, Communication Services +1.14%, Consumer Discretionary +0.94%, Industrials +0.11%, Real Estate +0.03%, Materials -0.1%, Energy -0.2%, Utilities -0.21%, Consumer Staples -0.28%, Health -0.49%, Financials -0.58%.

STOCKS
– Apple +4%: Plans to revamp entire Mac line with AI-focused M4 chips, according to Bloomberg; M4 Macs designed to bring AI capabilities and boost memory. First wave of M4 Macs to debut in late 2024, early 2025.Separately, it warned users of a spyware attack.
– Amazon +1.7%: Ordered to pay USD 525mln patent violation fine. Elsewhere, as they look towards 2024 (and beyond), they are not done lowering cost to serve.
– Costco +1.4%: Boosts quarterly dividend to USD 1.16/shr (prev. 1.02).
– Nike +3.4%: Upgraded at BofA with expectations rebased.
– Robinhood +3.6%: Downgraded at Citi.
– Ford flat: Cuts prices of electric F-150 pickup by up to USD 5,500 to boost sales.
– Marvel +0.2%: Gave an AI update at its event; Recorded over USD 550mln in AI related revenue in 2023. Looking ahead, sees AI contributing close to 30% of total revenue in 2024 and tripling to over USD 1.5bln, and sees USD 2.5bln for 2025 as a “solid base”.

OIL:
WTI (K4) SETTLES USD 1.19 LOWER AT 85.02/BBL; BRENT (M4) SETTLED USD 0.74 LOWER AT 89.74/BBL

Oil prices were lower on Thursday with the stronger Dollar weighing. In terms of newsflow, the US’ largest refinery, Motiva, Port Arthur (636k BPD), suffered two crude unit outages after a power outage late on Wednesday, although Reuters reported later on Thursday they had been restarted, which should, in theory, limit the amount of oil being stored in inventories that would have been seen had it been a longer outage. We also had the OPEC MOMR, which maintained its 2024 world oil demand growth forecast at 2.25mln BPD and 2025 forecast at 1.85mln BPD. On geopolitics, according to Israeli news website Ynet, Iran was planning to conduct a strike against Israel but postponed such action “at the last minute”. According to the report, Tehran decided to either delay the strike or change the nature of its response, suggesting that it was likely due to warnings from the US administration. Oil prices now head into another weekend with elevated geopolitical risk, although in terms of trend, prices have failed to make new peaks this week after last Friday’s apex in the benchmarks. Oil report courtesy of newssquarwk.

CRUDE down: $85.63                     -0.67%/-$0.58 ($86.59 – $84.89) Mid-Lows

BOND YIELDS:
US 1-MO 5.378 +0.002
US 6-MO 5.366 -0.16
US 1-YR 5.176 -0.028
US 5-YR 4.623 +0.01
US 10-YR 4.58 +0.02
US 30-YR 4.67 +0.036

2YR/10YR -0.37

CRYPTO
– Edgar Pavlovsky, the chief executive officer of the Solana-based decentralized finance (DeFi) platform Marginfi, has resigned amid internal conflicts
– The biggest winner from MarginFi’s leadership shakeup seems to be Solend, with $17 million in deposits in the last 24 hours and token rising 37%
– Kamino, another competitor, also saw $81 million in new deposits
– MarginFi is still Solana’s second-largest borrow and lend service and fifth-largest DeFi protocol by TVL despite seeing a 31% deposit exodus in a single day

– Jan van Eck, CEO of asset manager VanEck, one of the major issuers, said that Bitcoin ETFs are still in their infancy
– van Eck said brokerage platforms aren’t yet allowing advisors to recommend Bitcoin ETFs, though there have been reports that firms such as Morgan Stanley are evaluating them. “Those are our biggest customer bases,” van Eck told Fortune “So there’s a long ways to go.”

CRYPTO: BTC/ETH mixed:              +445/+0.64% 70341, -6/-0.2% 3513

No Call

KEEP DOING WHATS WORKING
STOP WHAT ISNT.

Best of luck out there. Let the market come to you

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